The number of homes seized by lenders jumped by 48% in the first half of this year as borrowers, squeezed by the credit crunch and rising mortgage costs, defaulted at levels not seen since the early 1990s property crash.

The Council of Mortgage Lenders said 18,900 properties were repossessed between January and June, compared with 12,800 in the same period in 2007, the highest figure for 12 years.

The number of households falling three months or more behind on mortgage payments is also spiralling upwards, rising to 155,600 in the first half of the year from 129,600 last year.

The figures will add to the deepening gloom hanging over the property market and the wider economy. Yesterday RBS, which owns NatWest, slumped to a £691m loss following £5.9bn in credit-crunch write-offs, and on Thursday Halifax, Britain's biggest mortgage lender, revealed that the average house price has dropped £20,000 in the past year, the biggest fall in property prices on record.

Ministers promised help for struggling homeowners, with the urgent expansion of a legal aid scheme for borrowers threatened with repossession. The housing minister, Caroline Flint, said: "We are providing more free debt advice and are working closely with lenders to ensure that repossession is only ever a last resort ... but it is important to remember that we are not seeing repossessions on the same scale as the early 1990s."

It emerged this week that, via Northern Rock, the government has become one of the biggest repossessors in the market. In the first six months of 2008 Northern Rock took almost 1,500 homes into possession.

The Conservative shadow chancellor, George Osborne, accused the government of "economic incompetence", while the Liberal Democrat shadow chancellor, Vince Cable, said: "For years house prices and personal debt were allowed to soar unchecked, and ordinary families are now feeling the effects. With rising mortgage repayments and sky-high food and fuel costs, it is little wonder that more and more people's budgets have been driven to breaking point."

Lenders called for calm. The CML is forecasting 45,000 repossessions this year, double last year's, but said: "These numbers remain extremely small when seen in the context of the 11.74m mortgages in the UK."

In 1991, the worst year for repossessions, 75,500 homes were seized, at a time when the number of mortgages outstanding was smaller. "The possession rate now is similar to that of the late 1990s, but remains less than half the rate experienced in the early 1990s," said the CML.

Critics say repossessions will escalate beyond the projections, and unlike the early 1990s, there is less help available.

Shelter's chief executive, Adam Sampson, said: "With current fears that unemployment is set to grow, there is no doubt we are inching ever closer to the dark days of the last repossession crisis.

"But the real horror is that today struggling homeowners have less protection than in the 1990s, but most people don't even realise it.

"Research by Shelter shows 23% of mortgage payers think they would receive prompt state help if they could not pay their mortgage. In reality, because financial help for homeowners in difficulty was cut after the last housing crash, nothing would kick in for nine months, which is too late."

This week the Financial Services Authority warned lenders that repossession should only be used as a "last resort". It said mortgage lenders could face heavy fines or be barred from particular markets as part of a regulatory crackdown on firms that put excessive pressure on homeowners falling behind on loan repayments.